Cabela's
Cabela's
Public
(Acquisition completed September 25, 2017 by Bass Pro Shops )
Traded as NYSECAB
S&P 400 Component
Industry Retail
Founded Chappell, Nebraska, U.S. (1961)
Founder Richard N. "Dick" Cabela
Jim Cabela
Headquarters Sidney, Nebraska
Number of locations
82 (May 2016, U.S. and Canada)
Key people
Jim Cabela
(Chairman)
Thomas Millner
(CEO)
Scott Williams
(President)
Products Hunting, fishing, and outdoor merchandise
Revenue IncreaseUS$4.129 billion (2016)
DecreaseUS$273.94 million (2016)
DecreaseUS$146.95 million (2016)
IncreaseUS$8.97 billion (2016)
Number of employees
19,100 (2016)
Website www.cabelas.com

Cabela's Inc. is an American direct marketer and specialty retailer of hunting, fishing, boating, camping, shooting, and related outdoor recreation merchandise, based in Sidney, Nebraska. The company was founded by Richard N. Cabela in 1961 and went public in 2004, with that fiscal year's revenue reaching $1.56 billion, a 50% growth since 2001.

Its direct marketing operation is one of the largest in the United States. Cabela's mail-order catalogs are shipped to 50 states and 120 countries. More than 120 million catalogs were mailed in its first year as a public company.[1] It also has "Trophy Properties LLC" (a real estate market), the "Gun Library" (for buying and selling new, used, and collectible firearms), and World's Foremost Bank (the issuer of Cabela's Club Visa credit cards).

Water tower at Buda, Texas next to Cabela's store

History

The company that would become a sporting goods reseller and chain was started in 1961. Richard (Dick) N. Cabela purchased $45 worth of fishing flies at a furniture expo in Chicago which he then advertised for sale in a local newspaper advertisement.[2] When his first effort produced only one response, he placed an ad in a national magazine, Sports Afield, which was more successful. Included with each order was a catalog of other products for sale by Cabela.[2]

As the business grew, Cabela and his wife Mary moved their operation to Sidney, Nebraska in 1963. Dick's brother Jim also joined the business. From those modest beginnings, the company has since grown to a publicly traded corporation with over $3 billion in annual sales.[3]

On February 17, 2014, founder Dick Cabela died at his home in Sidney, Nebraska, at the age of 77.

Operations and ownership

Founders Dick and Mary Cabela and Dick's brother James Cabela retained 25% ownership of the now public company which trades under the stock symbol CAB.

About half of Cabela's sales come from hunting-related merchandise with about a third derived from the sale of firearms, ammunition and accessories in 2012. Additionally, in 2012 30% of revenue came from direct sales (through catalog and online orders), and 59% from physical retail stores. The remaining 11% of revenue came from its financial subsidiary and credit card business.[1]

In 1996 Gander Mountain, prior to declaring bankruptcy, sold its mail order business to Cabela's with a no-compete clause. In 2007, Cabelas brought suit against them to prevent their re-entry into the mail-order business. Gander Mountain won the lawsuit and began selling online as well.[4]

In February 2013, Cabela's sued Gander Mountain for patent infringement over a fold-up cot that Gander was selling.[4] In December 2013, Gander sued Cabela's for cybersquatting.[4]

As of December 2013, the company had performed strongly in the $646 billion outdoor recreation sector with a stock price gain of close to 50% and consolidated revenue moved up 14.8% year-over-year to $850.8 million. Earnings per share came in at $0.70 which was higher than 2012's earnings of $0.60 per share.[5]

In March 2014, Cabela's sold their recreational real estate division, Cabela's Trophy Properties, to Sports Afield.[6]

In December 2015, Cabela's sold their Outdoor Adventures & T.A.G.S. divisions to Worldwide Trophy Adventures.[7]

On October 3, 2016, Bass Pro Shops announced an agreement to acquire Cabela's for $5.5 billion.[8]

Retail stores

Cabelas Store in Wheeling, West Virginia.
Musk oxen mounted and on display at store in Buda, Texas.

Cabela's has a distinctive look to its retail operations, a look which turns its retail stores into tourist attractions.[] The stores are more like cavernous showrooms, bringing the outdoors inside. They feature museum-quality displays of taxidermied wildlife, large aquariums, indoor mountains, and archery ranges. The success of the format is illustrated by the company's Kansas City, Kansas store at over 180,000 square feet (17,000 m2), which attracted more than four million customer visits in one year.[] Currently, the largest Cabela's retail facility is in Hamburg, Pennsylvania, with more than 250,000 square feet (23,000 m2) of floor space.

Plans for international expansion began to develop, and in 2007, Cabela's purchased family-owned S.I.R. Warehouse Sports Store in Winnipeg.[9] In 2010, the Canadian Head Office and Distribution Centre moved across the city, leaving the original location as only a retail store. The company had intended to be a part of the 1,400,000-square-foot (130,000 m2) Lac-Mirabel project near Montreal, which was to include 220,000 square feet (20,000 m2) of retail space, and was planned to open in 2008.[10] But instead, rival chain Bass Pro Shops became one of the mall anchors.[11] In 2011 Cabela's opened a 70,000-square-foot (6,500 m2) store in Edmonton, Alberta and a 50,000-square-foot (4,600 m2) store opened in Saskatoon in 2012 another 70,000-square-foot (6,500 m2) store in Calgary, Alberta opened in 2015. A 6500m2 store will anchor the new McCallum Junction retail development in Abbotsford, British Columbia from June, 2016.

Gun Library

The 85,000-square-foot (7,900 m2)[12] store just off Interstate 80 on the southern edge of Sidney, Nebraska illustrates some of the elements. The grounds include a acre pond and two bronze double-life-size bull elk on one side of the building. Inside, moss rock pillars hold trophy elks of huge proportions. A 27-foot (8 m)-tall replica of a mountain is framed in a 48-foot (15 m) mural of blue sky. The mountain is covered with 40 lifelike game trophies and features a waterfall and ponds. Suspended in the air between the entryway and the mountain is a flock of stuffed Canada geese.

Their retail showrooms include a restaurant, a gun library, where one can see examples of the gunmaker's art, and a travel service. The Boise store has a museum dedicated to Elmer Keith.[13] The Cabela's in Maine has an amusement park style shooting gallery, featuring handguns and rifles.

The newest Cabela's retail store locations opened in Huntsville, Alabama, on September 30, 2015, and Bristol, Virginia, on October 1, 2015. These are the first Cabela's retail store locations in Alabama and Virginia. Another nine stores, including Garner, North Carolina, and Fort Mill, South Carolina, are scheduled to open in 2015-16. The company has announced plans to nearly double its number of current retail locations within the next four years.

Cabela's Outposts

In early 2012, Cabela's unveiled a new retail initiative called Cabela's Outpost Stores. According to the press release for the Union Gap, Washington, location, they "will introduce the unique Cabela's retail experience to customers in underserved markets across the United States and Canada".[14] The first outpost store opened in Union Gap in the fall of 2012.

Acquisition by Bass Pro Shops

On October 3, 2016, Cabela's announced Bass Pro Shops will acquire Cabela's for $5.5 billion.[15] Both companies are major outdoor apparel and equipment retailers.[16] During mergers, the synergies between entities is emphasized, however it seems that both retailers in this instance have complementary business philosophies, product offerings and expertise. Further the two retailers have different geographic footprints. Cabela's 85 stores are concentrated in Canada and the western USA. Bass Pro Shops, conversely, has 99 stores with a concentration in the eastern USA and Canada.[16]

Tommy Milner stressed that the company had reviewed a range of options that would maximize value, with the Cabela's board choosing to be acquired by Bass Pro Shops.[15]

The new entity will keep Cabela's base in Sidney and Lincoln, Nebraska. John Morris will continue as CEO of the new entity, and will be the majority shareholder of the new privately held entity.[16]

The deal is being financed via preferred equity financing from Goldman Sachs and Pamplona Capital Management. Goldman Sachs will contribute $1.8 billion towards financing and Pamplona will contribute the remainder for a total commitment of $2.4 billion.[16] The new entity was expected to be formed and in operation in Q1 or Q2 of 2017.

On July 5, 2017, the Federal Trade Commission approved the merger of Cabela's and Bass Pro Shops and the deal is expected to be complete by late 2017.[17]

Banking and finance

Founded on March 23, 2001 (FDIC Certificate #57079), Cabela's financial subsidiary is named World's Foremost Bank (WFB, a play on Cabela's marketing moniker, World's Foremost Outfitter).[18] The bank's primary activity is as a credit card issuer for the Cabela's Club Visa card, a branded rewards card. With 11% of total sales attributed to the subsidiary, in 2013 it ranked as the 13th largest issuer of credit cards in the US.[1] Around a third of Cabela's customers have this Visa card.[19]

The subsidiary consists of a single-branch bank with a deposit market share in the state of Nebraska of just under 1.2 percent, with $505 million in deposits as of 2011.[20] As of the end of 2012, the bank claimed to have $3,731,567,000 in assets.[21]

Sean Baker was appointed president of World's Foremost Bank and chief executive officer on January 1, 2013. Baker replaced Joseph M. Friebe, whose planned retirement was announced in June 2012.[22]

2011 FDIC settlement

In its annual report, Cabela's announced that it has reached a settlement with the Federal Deposit Insurance Corporation (FDIC) regarding its credit card policies and practices. It was ordered to repay wronged cardholders $10 million plus a $250,000 penalty.[19][23] The subsidiary did not admit to or deny the FDIC's finding, but agreed to do the following:

  • Refrain from the Bank's prior practice of contacting a cardholder at the cardholder's place of employment for purposes of collecting a debt after a verbal or written request is made by either the cardholder or the cardholder's employer to cease such contact because the cardholder's employer prohibits such communications.
  • Refrain from the Bank's prior practice of assessing a penalty interest rate on balances that existed prior to the event that caused the penalty interest rate to be imposed.
  • Refrain from the Bank's prior practice of assessing late fees when periodic payments are due on Sundays or holidays and the payment is posted the following business day.
  • Refrain from the Bank's prior practice of assessing a second over-the-credit-limit fee (OL fee) on the first day of a billing cycle when a cardholder exceeded his or her credit limit during the prior billing cycle, was assessed an over limit fee during the prior billing cycle and was over limit at the end of that billing cycle and through the beginning of the next billing cycle.
  • Refrain from the Bank's prior practice of imposing an over limit fee if such fee is imposed as a result of applying a cardholder's reduced credit limit to balances that preceded the date of a credit line decrease, or imposing an over limit fee if such fee is imposed solely as a result of a credit line decrease at the end of the billing cycle without adequate notice.
  • Refrain from the Bank's prior practice of establishing a minimum periodic payment amount that is insufficient to avoid recurring OL fees.
  • Refrain from the Bank's prior practice of implementing an increase in penalty rates without providing adequate notice to cardholders, as required by 12 C.F.R. § 226.9.[19][23]

Additionally, the FDIC required WFB to make certain changes in their management policy to increase oversight of their credit card business and to prevent further unfair practices.

2011 Royal Bank of Canada loan

The Bank entered into a $411.7 million commitment with the Royal Bank of Canada under a series of variable funding notes issued by Cabela's Credit Card Master Note Trust. The loan is for three years and accrues interest at a variable rate of commercial paper plus a spread.[22]

Television

Cabela's has produced several television series, which are called Cabela's Outfitter Journal and Cabela's Memories in the Field. They are broadcast on WildTV and The Outdoor Channel. They currently produce Cabela's Instinct: Expedition, which first aired in 2016. It is broadcast on The Outdoor Channel.

Video games

Cabela's has produced several series of video games for a variety of gaming platforms, including Cabela's Big Game Hunter series, Cabela's Dangerous Hunts series, and Cabela's Outdoor Adventures series.

See also

References

  1. ^ a b c Santoli, Michael. "Outdoor Enthusiasts Flock to Cabela's, Investors Follow". Yahoo Finance. Retrieved 2013. 
  2. ^ a b Staff (May 2014). "Random Shots: In Memory: Richard "Dick" Cabela". American Rifleman. 162 (5): 28. 
  3. ^ Richard Cabela, who co-founded outdoor gear retailer, dies at 77
  4. ^ a b c Orrick, Dave. "Gander Mountain sues Cabela's over web addresses". TwinCities.com, Pioneer Press. Retrieved 2013. 
  5. ^ Singh, Amal. "Can More Upside Be Expected From Cabela's?". The Motley Fool. Retrieved 2013. 
  6. ^ "Sports Afield Buys Recreational Real Estate Firm | License! Global". www.licensemag.com. Retrieved . 
  7. ^ "WTA Redirect : Cabela's". Retrieved 2016. 
  8. ^ "Cabela's stores to be sold to Bass Pro Shops for $5.5 billion". Retrieved 2016. 
  9. ^ Canadian Broadcasting Corporation (2007-08-16). "U.S. firm buys longtime Winnipeg outfitter". CBC News. Retrieved . 
  10. ^ Cabela's Montreal store Press Release Cabelas.com
  11. ^ "Lac Mirabel press release" (PDF). Retrieved 2016. 
  12. ^ "Retail Stores : Cabela's". Retrieved 2016. 
  13. ^ Huntington, Roy (2008). "Elmer Keith museum is open! Cabela's in Boise, new home". American Handgunner. 29 (3): 127. 
  14. ^ "Cabela's® Unveils New Outpost Store Retail Initiative". cabelas.com. 2011-02-16. Retrieved . 
  15. ^ a b "Cabela's Agrees to Buyout by Bass Pro in $5.5 Billion Deal". Bloomberg.com. 2016-10-03. Retrieved . 
  16. ^ a b c d "Bass Pro Shops and Cabela's To Merge in $5.5 Billion Deal - CoStar Group". www.costar.com. Retrieved 2016. 
  17. ^ Henry, Devin (2017-07-05). "Regulators approve Bass Pro Shops, Cabela's merger". TheHill. Retrieved . 
  18. ^ Staff. "Commercial Banks; Company Overview of World's Foremost Bank". Bloomberg Business. Retrieved 2013. 
  19. ^ a b c Barr, Colin. "World's foremost credit card ripoff: update". CNN Money. Retrieved 2013. 
  20. ^ Henderson, Tom. "Who's world's foremost bank? Not World's Foremost Bank - Cabela's Visa rewards program goes awry". Crain's Detroit Business. Retrieved 2013. 
  21. ^ Staff. "About Us". wfbcds.com. Retrieved 2013. 
  22. ^ a b "Company Overview of World's Foremost Bank". BusinessWeek. Retrieved 2013. 
  23. ^ a b Staff. "CONSENT ORDER AND ORDER TO PAY FDIC-10-775b FDIC-10-777k In the Matter of WORLD'S FOREMOST BANK SIDNEY, NEBRASKA" (PDF). fdic.gov. Retrieved 2013. 

External links


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